Pico Rivera placed a temporary moratorium on check-cashing businesses in the city, Airan Scruby reports. In the city, there are eight of these types of business, which one councilman called “abusive.” Actually, that’s really the only reason why the council said they needed such a ban.

Which brings me to the question I would have asked the councilman: Just because a business practice may be perceived as being abusive, does the government have the right to stop such businesses from existing? I feel abused each time an ATM charges me a $2 transaction fee. (For all those Flight of the Conchords fans, you know that Jermaine and Bret put that issue better in song than I can put in words.)

Also, I wonder how the number of these check-cashing businesses in Pico Rivera compare with other cities.

Payday loan store ban goes on By Airan Scruby, Staff Writer Article Launched: 02/19/2008 08:52:04 PM PST

PICO RIVERA – A temporary moratorium on check-cashing businesses in the city will continue for one year, officials said.
The ban, which prevents any new check-cashing and payday loan businesses from setting up shop in the city, has been established for 45 days, but was approved for an additional 10 months, 15 days. City staff asked for the extension to better investigate the need for restrictions on the establishments.

“This council should reserve the right to at any time legally neutralize any business,” Councilman Gregory Salcido said at a Feb. 12 meeting.

Eight check-cashing establishments exist within the city limits, while there are just six traditional bank branches.

The businesses give short-term loans, to be repaid by customers when they receive their paychecks.

They also cash checks for a fee, usually based on percentage. The cost is between 10 percent and 25 percent of the amount borrowed.

Mayor Ron Beilke said he expected the extension to pass, because of the council’s view of what the businesses do in the community.

“It was basically a given,” Beilke said. “They’re really abusive banking practices.”

Beilke said he and other city officials would rather see residents use traditional banks.

Raul Murga, director of the Pico Rivera Community for Truth in Politics, spoke against the ban at the meeting.

“I do feel that this is too much intervention from government,” Murga said.

First Amendment attorney Roger Jon Diamond said Tuesday he believes there is little that can be done about the temporary ban, but any permanent move in the city to ban check-cashing businesses could be successfully challenged in court.

Diamond said a permanent ordinance against any one type of business contradicts laws already on the books.

airan.scruby@sgvn.com
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